Correlation Between CompuGroup Medical and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Molina Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CompuGroup Medical and Molina Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and Molina Healthcare, you can compare the effects of market volatilities on CompuGroup Medical and Molina Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CompuGroup Medical with a short position of Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Molina Healthcare.
Diversification Opportunities for CompuGroup Medical and Molina Healthcare
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CompuGroup and Molina is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare and CompuGroup Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CompuGroup Medical SE are associated (or correlated) with Molina Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molina Healthcare has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Molina Healthcare go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Molina Healthcare
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 1.19 times more return on investment than Molina Healthcare. However, CompuGroup Medical is 1.19 times more volatile than Molina Healthcare. It trades about 0.17 of its potential returns per unit of risk. Molina Healthcare is currently generating about -0.02 per unit of risk. If you would invest 1,347 in CompuGroup Medical SE on October 24, 2024 and sell it today you would earn a total of 873.00 from holding CompuGroup Medical SE or generate 64.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Molina Healthcare
Performance |
| Timeline |
| CompuGroup Medical |
| Molina Healthcare |
CompuGroup Medical and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Molina Healthcare
The main advantage of trading using opposite CompuGroup Medical and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Molina Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Molina Healthcare will offset losses from the drop in Molina Healthcare's long position.| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. Intel |
| Molina Healthcare vs. CompuGroup Medical SE | Molina Healthcare vs. IMAGIN MEDICAL INC | Molina Healthcare vs. Diamyd Medical AB | Molina Healthcare vs. AIR PRODCHEMICALS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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